President proposes overhaul of foreign food aid and end to P.L. 480

by Jay Sjerven
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WASHINGTON — President Barack Obama’s fiscal 2014 budget released April 10 includes a dramatic overhaul of U.S. international food assistance programs.

The president proposed an end to Food for Peace (P.L. 480 Title II), the principal vehicle through which the U.S. government and people have provided food assistance to the poor and hungry abroad for nearly 60 years. Funds that ordinarily would be appropriated in the agriculture budget for P.L. 480 Title II foreign food assistance instead would be shifted into other accounts under the aegis of the U.S. Agency for International Development’s (USAID) and its Office of Food for Peace. USAID would have expanded flexibility in deciding how food assistance will be provided and no longer would be required to purchase food only from American producers and businesses for its food donations abroad.  

USAID asserted the food aid reform would allow life-saving assistance to reach an estimated 2 million to 4 million more people annually with the same budget resources. Critics of the proposal worried that without the support of key constituencies in both Congress and the private sector that have helped sustain international food assistance over the decades, those budget resources essential to help feed the world’s hungry may diminish under this or future Congresses or administrations.

The president’s budget requested $1.8 billion for food assistance in fiscal 2013. It would shift $1.1 billion that otherwise would be appropriated for P.L. 480 Title II to USAID’s International Disaster Assistance (I.D.A.) account for emergency food response. USAID’s Office of Food for Peace currently implements a $300 million cash-based program to provide emergency food assistance funding through I.D.A. Under the budget, total funding for emergency food response through I.D.A. would be $1.4 billion.

The budget would shift another $250 million that otherwise would be appropriated to P.L. 480 Title II to USAID’s Development Assistance account for the Community Development and Resilience Fund (C.D.R.F.) to address chronic food insecurity in areas of recurrent crises. The C.D.R.F. also will have $80 million in Development Assistance funding from the Bureau of Food Security resources, so total funding for the C.D.R.F. in fiscal 2014 would be $330 million to be managed by USAID’s Office of Food for Peace.

USAID said the C.D.R.F. programs will uphold the longstanding mission of Title II development programs to address chronic poverty, build resilience, and help prevent food crises.

“After the cost inefficiencies of Title II are taken into account, these development programs will support the same level of program activity leading to more people helped through food assistance,” USAID asserted.

The budget also would create a new Emergency Food Assistance Contingency Fund ($75 million) that USAID said would enable the president to provide emergency food assistance for unexpected and urgent food needs worldwide “with the same flexibility to use the right tool to address above-trend emergencies that is at the core of these reforms.”

 USAID said the reforms would enable experts to select the appropriate tools to most efficiently meet the needs of hungry and vulnerable people. The reform would pair in-kind food aid procurements from the United States with a more expansive use of interventions such as food vouchers and local and regional procurement from developing countries near crisis areas.  USAID asserted studies showed local and regional procurement of food and other cash-based programs can get food to people in critical need 11 to 14 weeks faster and at savings of 25% to 50% compared with sole dependence on P.L.480 Title II shipments of U.S. food.

USAID indicated the non-emergency development programs previously implemented through Title II would remain an important element of the U.S. government’s response to global hunger.  The agency said, the food aid reform proposal would maintain both the intent of Title II development programs to reduce chronic poverty, build resilience, and help prevent future food crises as well as equivalent funding levels at $330 million.

The food aid reform proposed in the president’s budget also would end the practice of Title II monetization, the donation of U.S. food to private voluntary organizations that then sell the U.S. food on the open market in the countries in which they are seeking to sustain and support development projects. USAID pointed to studies indicating monetization was a wasteful enterprise and that by eliminating the practice, U.S. development food aid would reach an estimated 800,000 more undernourished women, men, and children.

The food aid reform proposal guarantees that in fiscal 2014 no less than 55% of the requested $1.4 billion in total funding for emergency food assistance in I.D.A. will be used for the purchase, transport, and related costs of U.S. commodities.

USAID said U.S. commodities would make up a significant portion of purchases, particularly for many processed foods and large cereal procurements that are unavailable elsewhere in the world or produced in insufficient amounts by developing countries near crises.   In other cases, U.S. commodities may be the best option because of inflation or food price volatility, it said.

To mitigate the effect on the U.S. merchant marine (by law, at least 50% of the gross tonnage of all U.S.-government generate cargo must be transported by U.S.-owned vessels, if available), $25 million of the efficiency savings obtained through these reforms will be shifted to the Department of Transportation's Maritime Administration to help retain militarily-useful U.S.-flag vessels as well as to provide incentives to facilitate the retention of mariners in the workforce.

President George W. Bush and his USAID administrator Andrew Natsios promoted a similar but less extensive overhaul of P.L. 480 Title II food assistance but encountered congressional blowback that limited their efforts to pilot programs for cash-only food aid.

The fate of President Obama’s proposal was uncertain.

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READER COMMENTS (1)

By MRC 9/24/2013 3:15:13 PM
P.L. 480 Title II Program Proposed reallocation in 2014 Budget of funds exchanging food exports for cash to purchase from other countries closer and agriculture development.